UK plea on Greek bailout agreement

Herman Van Rompuy said negotiations on a Greek bailout package are on track

Chancellor Alistair Darling has called for Eurozone countries to "urgently" agree a bailout for Greece or risk a further decline in stock market confidence.

Mr Darling said it was "absolutely essential" that Greece's problems were sorted out "quickly, effectively and decisively", following a torrid 24 hours for world markets.

Almost £39 billion was wiped off the value of the FTSE 100 Index on Tuesday amid fears over debt-laden Greece and Portugal, while New York's Dow Jones industrial average fell 1.9% and Japan's Nikkei 225 was down 2.5%.

The falls came as ratings agency Standard & Poor's slashed Greece's sovereign debt to junk status, and sparked worries over contagion by downgrading Portugal due to the "amplified risk" faced by its own economy.

Senior Cabinet ministers downplayed fears that Britain could suffer a similar fate.

Greece called for funds from a 45 billion euro (£39 billion) bailout package, but some European countries still have to approve the aid and fears are rising over whether the money will arrive before a bond payment deadline of May 19.

European Union president Herman van Rompuy said negotiations were "well on track", with a summit planned for May 10.

But speaking to LBC Radio, Mr Darling said: "This problem is now urgent, it needs to be dealt with quickly, effectively and decisively."

Asked about the drop in the FTSE, the Chancellor said stock markets rise and fall but added: "That's my argument about the situation in Greece - we have got to make sure that it gets sorted out. But the primary responsibilities are for the other members of the euro group...They know that they have got to sort it out. They have promised money, and what I would say is they need to make that money available as soon as possible."

He added: "If we can sort out the problems in Greece quickly, then that will make people more confident."